On July 15, 2015, the Supreme Court of New Jersey ruled that an employee who monitors corporate compliance—a so-called “watchdog” employee—can engage in protected activity by blowing the whistle under the New Jersey Conscientious Employee Protection Act (“CEPA”) in the course of performing the tasks and functions of the job for which he or she was hired. Lippman v. Ethicon, No. A-65/66-13. In so ruling, the Court rejected a well-established line of lower court cases holding that activities which are part and parcel of an employee’s assigned responsibilities cannot amount to whistleblowing—otherwise known as the “job-duties” exception.

By way of background, the Plaintiff, Joel Lippman, vice president of medical affairs and chief medical officer at Defendant Ethicon, Inc., had responsibilities which included the evaluation of health risks posed by Ethicon products. Plaintiff maintained that, on several occasions, he objected to the sale and distribution of certain Ethicon products on the grounds that they were medically unsafe and that their sale violated applicable laws and regulations. Plaintiff claimed that, due to his “whistleblowing activities,” Defendant terminated his employment in violation of CEPA.

The trial court dismissed Plaintiff’s complaint under the “job duties” exception, but the Appellate Division reversed. While the Appellate Division ruled that a “watchdog” employee could invoke the CEPA, it also held that, unless the watchdog refused to participate in the objectionable conduct, he or she must first exhaust all internal means of securing compliance.

On appeal, the Supreme Court not only affirmed that watchdog employees are eligible for whistleblower protection under CEPA, but also rejected the Appellate Division’s “exhaustion requirement.” The high court found “no support in CEPA’s language, construction, or application in th[e] Court’s case law that supports that watchdog employees are stripped of whistleblower protection as a result of their position or because they are performing their regular job duties.”

There is growing concern that the Court’s decision will have the effect of creating a class of watchdog employees against whom employers cannot take adverse employment actions without risking a CEPA claim.